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26,561 mn to support production sector activities and SMEs.
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The UPFA government’s maiden budget set aside Rs. 26,561 mn to support production sector activities and SMEs. Production activities included the sectors of small and medium industries, agriculture, plantation, livestock, fisheries, enterprise development and tourism.
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However, the government hopes to focus on SMEs to generate employment and develop backward areas of the island.
"A recent Asian Development Bank (ADB) survey revealed that absence of a SME business friendly bank and prevalence of complicated loan application procedures is a significant factor inhibiting SME access to credit," said the Minister of Finance Sarath Amunugama.
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To get over this credit-access difficulty in making SME’s the “nerve centre of Sri Lanka’s development process,” the budget 2005 pledged to set up an SME Bank.
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With a Rs. 5 bn seed capital, the bank will provide direct funds, credit guarantee schemes, equity and debt capital, restructuring aid to the SME sector.
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"I propose to transfer Rs. 5 bn